NSE India : S&P CNX Nifty — Daily Market Report for:
Monday (February 20, 2012) By Dominic Rebello
Review of the Previous day:
The Nifty rose moderately on Friday (February 17, 2012) a net 42.35 points (0.77%) and closed at the 5564 point level. The market opened up with a gap at the 5574 points level on positive global cues. It then rose further and registered the day’s high at the 5606 points level at 10.27 a.m. It then declined and turned into a range bound movement until 2.00 p.m. It then declined further and registered the day’s low at the 5545 points level 2.30 p.m. It then rose and turned into a range bound movement until closing at the day. The index remained above its previous close throughout the session and moved in a range of 62 points. Sentiment was bullish and amongst the 50 Nifty stocks, 32 were gainers, 17 were losers and 1 remained unchanged. Heavy buying was witnessed in consumer durables, power, capital goods, IT and banking stocks, while selling was witnessed in auto, metal and healthcare stocks.
Technical Analysis:
Volume:
Volume (Qty shares) increased 19.64%. This change is substantial and indicates a wide participation by investors.
Market Breadth:
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 667 were gainers, 792 were losers and 56 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator has declined in the over-bought zone.
The Slow K line in the Stochastic Oscillator has dropped below the slow D line (negative and a sell signal). However, such signals are considered invalid in the over-bought zone.
RSI Indicator:
The RSI is above the 60 level and is now rising (positive if it continues).
MACD Indicator:
The MACD is above zero and is now rising (positive if it continues). It is above its 9-day Average (positive).
ADX Indicator & DI Lines:
The +DI line is above the –DI line and both lines are diverging (positive if it continues).
The ADX is rising while the Market Index is rising, which indicates that the present up trend is increasing in strength.
Moving Averages (Trend Indicators)
The index:
Is above its 5-day average (at 5484) Positive.
Is above its 15-day average (at 5360) Positive
Is above its 25-day average (at 5226) Positive
Is above its 200-day average (at 5172) Positive.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a strong market with a positive bias.
Support Levels:
For short-term traders the immediate main support is at 5040 marked as S1.
The next support is at 4900 marked as S2.
Resistance Levels
The immediate main resistance is at 5605 marked as R1.
The next resistance is at 5743 marked as R2.
Pivot Point Analysis:
For intra-day traders the support and resistance levels are calculated according to the pivot point theory and are:
Pivot point = 5572 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5537.
Support (2) = 5511.
Resistance (1) = 5599.
Resistance (2) = 5634.
OUTLOOK FOR TODAY:
On Japanese candlestick patterns the index has formed a second consecutive doji pattern. This indicates that the indecisiveness amongst investors continues. The next candle formation will confirm whether the bias is towards the buy or sell side of the market. However, the index is above the 5, 15, 25 and 200 day’s moving averages and all the 4 averages are positively trended. Further, the 5, 15 and 25 day’s moving averages are rising. Moreover, the velocity parameters continue to indicate strength. All these indicate a positive bias and the possibility of a further up move unfolding. Incidentally, the index is approaching a major resistance level at the 5605 points level. (The index tested that level intra-day, in the previous session) There is a possibility that it could face some further resistance there. However, if it crosses above it than a further rise can be expected. Investors are advised to hold long positions.